In addition, firms representing more than 40 per cent of face-to-face sales in the single premium unsecured personal loan PPI market have agreed to the review their sales and redress consumers where required.
The regulator’s new guidance on PPI sales, due to take effect by the end of the year, aims to ensure PPI complaints are handled properly and redressed fairly where appropriate.
The FSA says too many complaints are rejected by firms and then overturned by the Financial Ombudsman Service in favour of the consumer.
The measure, announced today, builds on the agreement the FSA obtained from the industry earlier this year to stop selling single premium PPI on unsecured loans.
In addition, the FSA is launching targeted assessment of sales practices for PPI on secured loans and credit cards.
If the potential for misselling is identified, the FSA says pro-active reviews by firms may be extended to these areas too.
FSA managing director of retail markets Jon Pain says: “Consumers should not be pressured or deceived into buying PPI and they are entitled to have a policy properly explained to them. It is unacceptable that despite previous warnings about poor sales practices, backed by 22 enforcement cases and significant fines, the PPI sector still needs the FSA to intervene on this. And the outcome of a complaint about a PPI sale should not depend on whether or not the complainant persists past the firm on to the FOS.
“This is the last chance for the industry to show that it can act fairly, consistently and in the best interest of consumers on PPI. All firms operating in this sector should take note and where necessary get their house in order. Where we find questionable practices in sales or complaint handling, firms can expect that we will take action.”
Financial Services Consumer Panel chairman Adam Phillips says: “The selling of PPI has a notorious history. We welcome the FSA’s proposal today to force firms to re-visit all rejected complaints about sales of PPI and re-examine them against new FSA guidance.
“However, this action has taken a long time and the FSA still needs to tackle PPI sold with credit cards, secured loans and mortgages where people may not have complained. We also still await FSA enforcement action against individuals in some of the bigger players who were responsible for the mis-selling of PPI.”